Deadly Collapse in Bangladesh

Garment Factory Crumbles, Killing at Least 200

The collapse of a factory building killed scores of garment workers in Bangladesh. The WSJ's Shelly Banjo talks about how the latest series of industrial disasters are making retail companies revalue the risks of cheap labor abroad.

DHAKA, Bangladesh—At least 200 people died Wednesday when an eight-story building housing garment factories collapsed, the latest disaster to strike a country that has become a major source of inexpensive clothing for Western retailers.

The Rana Plaza building in Savar, a commercial hub north of the capital, collapsed at 9 a.m., after work had started in several companies at a complex that houses roughly 5,000 workers. By nightfall, some 1,000 people had been rescued, a fire official said, but local officials who provided the death toll said it was likely to climb.

Most of the dead appeared to be women, said an official at the nearby Enam Medical College Hospital, where bodies were piled in the bathrooms and reception areas as doctors treated survivors.

Reduced to Rubble

A garment worker rescued from the ruins REUTERS

Industrial Disasters in Asia

Selina Akter, a 24-year-old woman who worked on the fifth floor, said people were evacuated on Tuesday after a large crack appeared on an exterior wall, but that a man she said owned the building told workers that it would stand "for another 100 years."

"There was a loud sound and then everything went dark," said Mehedi Hasan, who worked at the New Wave Style factory on the third floor. "I crawled out but a lot of people are trapped inside."

The building collapse came months after more than 100 workers died in a fire at the Tazreen Fashions Ltd. factory near Dhaka.

That incident focused international attention on Western companies' increasing use of factories here to produce low-cost clothes and so-called fast fashion, making Bangladesh the second-largest clothing exporter after China.

Canadian retail giant LoblawLBLCF1.08% Cos. confirmed that workers at the complex were making clothes for its Joe Fresh clothing line.

"We will be working with our vendor to understand how we may be able to assist them during this time," a spokeswoman said.

Wal-Mart Stores Inc.,WMT-0.25% which was listed as a customer on the website of one of the building's garment contractors, on Wednesday said it was "investigating across our global supply chain to see if a factory in this building was currently producing for Wal-Mart."

Children's Place Retail Stores Inc. confirmed that one of the factories has produced clothing for the company in the past, but said it wasn't currently doing so.

Foreign companies looking for cheap labor have flooded into Bangladesh in recent years, especially as rising pay in China has increased the cost of manufacturing there. In China, some provinces have raised minimum wages to more than $200 a month, while in Bangladesh the government sets the minimum wage for entry level garment workers there at less than $37 a month.

But some Western companies are rethinking their presence in Bangladesh as a series of horrific accidents have left more than 700 workers dead in factory fires in the past decade, according to labor groups. Building collapses have also been lethal; in 2005, the structural failure of a sweater factory killed 64 people and injured 80.

ENLARGE

SHATTERED: At least 159 people died in Savar, Bangladesh, when an eight-story building housing factories fell.
Palash Khan/Sipa Press

In March, Bangladesh's ministry of labor and employment, along with international labor unions and the Bangladesh Garment Manufacturers and Exporters Association, adopted a national action plan on fire safety for the industry. Plans included modernizing equipment, increasing the number of fire stations in industrial areas and overhauling fire- and building-safety laws and regulations, inspections and worker training.

Wal-Mart, whose products were found at the scene of the Tazreen fire even though it had barred contractors from using the factory, overhauled its global sourcing standards this year, adopting a "zero-tolerance policy" for violations. The retailer warned it would immediately sever ties with the companies that subcontract work to factories without Wal-Mart's knowledge starting on March 1, and at some point would publish the names of terminated factories on its website.

The retailer declined to comment on whether any supplier contracts have been terminated. "The transition to the new policy is still ongoing," a spokesman said.

Wal-Mart has begun paying for fire-safety reviews and inspections at all the Bangladesh factories it uses and donated $1.6 million to provide training on fire and workplace safety to garment-factory workers here.

Gap Inc.GPS1.19% says it has set aside $20 million to help Bangladesh factories improve safety.

Human-rights groups have been calling on apparel brands and retailers to sign on to the Bangladesh Fire and Building Safety Agreement, which would establish a system of independent factory inspectors whose recommendations would be binding.

But the program has yet to get off the ground. PVH Corp.PVH-0.10%, owner of Calvin Klein and Tommy Hilfiger, and German retailer Tchibo have signed up.

Nike Inc.NKE0.18% has limited its use of factories in Bangladesh because of concerns about working conditions. "We just visited the country and decided to reduce our Bangladesh footprint," Hannah Jones, Nike's vice president of sustainable business, said in a recent interview.

Foreign clothing companies conduct safety audits of factories they use, and normally avoid those based in mixed-use commercial buildings like Rana Plaza because having multiple tenants raises the possibility of hazards like blocked fire exits. But work is sometimes subcontracted to factories in such buildings.

The website of Ether Tex Ltd., a garment factory based on the fifth floor of the Rana Plaza, lists Wal-Mart and German retailer C&A among its buyers. A C&A spokesman said Ether Tex's website was outdated and that it ended all relationships with the facilities in 2011.

A document found in the rubble, made available to The Wall Street Journal by Bangladeshi workers, appeared to show a March 5 order for T-shirts given to Phantom Apparel by Spanish clothing store Mango.

A spokeswoman for Mango said none of the businesses in the building was working for it, though it was discussing "test production" with one.

The Rana Plaza building, constructed in 2007, also housed a bank on the second floor and some shops.

Shaikh Abdul Mannan, a senior official at Rajdhani Unnayan Kartripakkha, the government agency responsible for building safety in Dhaka, said the building didn't conform to the national building code.

Ms. Akter, who made clothes for Phantom on the fifth floor, said she was evacuated with other workers on Tuesday after a large crack appeared on an exterior wall near the third floor.

But later that day, Ms. Akter said, she attended a meeting at which the man she said owned the building, Sohel Rana, told workers there was nothing to worry about, saying, "The building will stand for another 100 years," she said. Mr. Rana, a local politician, couldn't be reached for comment.

On Wednesday, factory officials bearing megaphones urged employees gathered outside to return to work, Ms. Akter said, adding that they were told their pay would be docked if they didn't. Shortly after she did, the building collapsed, she said from her hospital bed.

"I was trapped in the darkness," she said. "There was choking dust. There was a big slab of concrete. I couldn't get out."

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